follow the steps of Your Money or Your Life (YMOYL)

YMOYL has gone far from my daily life. At one point, I was working with a high degree of dedication on several of the steps. Slowly and one-by-one, I have stopped. That doesn’t mean I’m not intuitively doing them, because the exercise of doing them for as long as I did transformed my thinking completely.

But I think it might be time to revisit . . . when I put up this goal, I was single with no inkling I’d ever be with anyone and no plans to be. Now I am married and together, we are still working on paying off my debt (it will happen so soon!). Two factors have brought YMOYL back into my mind. One is the marriage. It’s not just my future I’m planning for. The second is the fact that if all goes according to plan, we will be out of debt except for the mortgage within six months. Then what? We have some direction from Dave Ramsey, so we will be making a 3-6 month EF, but what about the bigger vision? If each asked our own life purpose, could we answer?

We are both teachers and as far as I know, pretty happy in our jobs. So we are not feeling a desperation to exit the workplace anytime soon, but I also do not feel that this is my life’s calling. I mean, I do not feel I will be doing it for my entire life, at least in this exact form. Maybe I’ll be involved in education for a long time – it is fulfilling, challenging, and you can make a living at it. I know he doesn’t want to work the whole way to the grave, either, but we are having a hard time articulating what our actual goals are. It’s like neither of us actually believes we could leave paid employment earlier than the requisite 55 or 62 or whatever the magic number is. See, it’s so far off I don’t even know! But I think we could, and if we don’t work toward that, then we never will. We’ll just fritter our money away on other stuff and never make it happen because we won’t be trying to make it happen.

And then there’s our house . . . even paying the payment amount only, we could be paid off in 8 years. That’s an amazing feeling and would get us that much closer to Financial Independence. But I am feeling kind of tempted to look at other places right now, especially since this tax credit was offered to already-homeowners. A few months ago, DH was the one into looking at other houses, so this isn’t just my nagging thing – his is just laying more dormant at the moment :) There are definitely some things we aren’t in love with about our house, but none that make us hate living here. There are lots of things we like, too, and my husband has put a lot of money and sweat into the home over the years (he’s owned it for 8). So the questions maybe should come into play . . . is a different house worth the life energy it would take to buy it? Is buying a different house just getting us further from our (undefined) goals? Or is it making an investment in a place we truly want to be, where we truly feel at home, is truly all the things we want it to be for the long haul?

Big time soul-searching update! As always, the 43T perspective is appreciated.

I have been doing some soul-searching about YMOYL and wondering if I should keep this goal on my list. I was really faithful about tracking my expenses, every penny, for about two years. Then my computer crashed and I lost the ability to do it routinely for about two months. At first it was REALLY HARD to let go of tracking. Now, it’s somewhat of a relief. I do my checkbook in Excel, but don’t worry about my cash, interest, etc. I realize how much time and stress tracking was before. But now, I am sad that I won’t be able to run a report a tax time about my charitable contributions. Or if I want to check up on how much I’m spending, say, on groceries, or on scrapbooking. And if I don’t track, I can’t do my wall chart, which is what I would miss most of all.

I wonder if I’ve gotten all the value I can get from YMOYL. Probably not, but I have learned a lot. I am less attached to my “gazingus pins” (AKA crap I don’t need, but used a buy a lot of without thinking about it). I have decluttered pretty thoroughly because I realized I had more than “enough.” I am working seriously on paying off my debt because I want to be financially independent. I routinely ask myself if purchases are worth my life energy – sometimes they are, and sometimes they aren’t.

And I still could do more – for example, I know I’m not earning as much as I could for my job. In other districts teachers are paid better. But I work in a healthy place, and that’s worth a LOT to me – so I haven’t done anything about it yet. I guess my job is worth my life energy at this point, to stretch that concept a little.

I think I will resume tracking. I like seeing my net worth and status on all my accounts in one place. But I want it to feel good, like it does now – feel like I know where I’m at (not going to overdraft, for example), but not that if I don’t have my accounts PERFECTLY updated all the time the world is going to come to an end. And I will keep thinking about it – after all, I think that is the core of YMOYL – to think about our financial actions and not just do because it’s what’s done.

I was doing really well at tracking for over two years. I had my system set up in Moneydance, a shareware program, and had lots of data to make graphs, etc. Well, my computer died, and since I’m focusing on my snowball, I don’t want to buy a new one. And I can’t install Moneydance on my work computer, or at least I don’t want to. Not sure which (that makes no sense except I know what I mean ;) ). So, at least I set up my checking account in an Excel spreadsheet on a flash drive that I can carry in my purse and update at work or at home on the checked-out laptop (as long as we can keep it).

I haven’t been doing the questions for a long time, though the lens is still in place, the lens the questions provide for examining all my purchases. To me, that’s the essence of doing the monthly questions, so I’m not too sad that I haven’t actually sat with my numbers and done them.

Need to figure out a cash tracking system, which has always been my downfall, anyway. At least with tracking everything I can still do my Wall Chart.

Dave Ramsey’s approach has captivated my interest more as of late . . . not that I think less of YMOYL . . . but I think YMOYL is a deeper transformation. I think in my case I needed that before I could be ready to try Dave Ramsey’s baby steps. I needed to have a mental framework for approaching spending, one that made me feel like it wasn’t deprivation to be frugal but rather me being in charge of my money and my life. So I am grateful to YMOYL for that. Plus, think of how much my expenses line will drop on my Wall Chart once I’m not shelling out hundreds in debt payments!! That’ll be a great day!

The net worth chart is more exciting to look at than the wall chart. However, this isn’t debt paid off. I’ve been concurrently saving toward retirement and so this reflects both debt paid off and that savings. I still have over $20K in debt. Working on it!!!

There is a big discussion over on the Simple Living Network forums (well, not big, but a discussion) about Wall Charts. And since someone wanted an example, I thought I’d put mine up.

It is all over! The examples in the book are much more idealistic, I think. I mean, life happens. I had to pay tuition and medical bills. I got tax refunds, which I calculate as income since I calculate the taxes as an expense. Maybe that’s not right, but it’s how I do it.

I also am not concerned that in a few months my income is higher than expenses because, at least for the history of this chart, those expenses were planned and saved for – or at the very least, did not cause me to go further into debt.

Enjoy! I will post my net worth chart in a separate entry.

The questions just don’t seem to help motivate me . . . . at least the monthly examination of the questions. The daily “is this worth my life energy” question is very helpful. Maybe since I’m asking regularly, there isn’t a lot on the end-of-the-month tabulation that I strongly feel wasn’t worth it . . .

I have read YMOYL life again over the last week or so. I wanted to make sure my commitment to the integrity piece was really there. I definitely learned some things.

The steps, and how much of them I am doing, are:
Step 1: Making Peace with the Past1a. Figure out how much you have earned in your life: I have not attempted this step yet.
1b. Figure out your net worth by creating a personal balance sheet of assets and liabilities – everything you own and everything you owe: I started this step when I first started on YMOYL. I never finished, though. It’s overwhelming to inventory everything you own. However, to fully do this step, I need to re-do this part. When I first did it, this kickstarted me into spending a lot less, because I could see, for example, that I already had 82 pairs of socks (literally). It was very important. Also, I know I’ve increased my net worth over the last year, so it would be interesting to see exactly how much.

Step 2: Being in the Present – Tracking your Life Energy2a. Compute your real hourly wage: I have done this and do this in order to do the other steps. This is figuring out what you really make at your job after paying all the associated costs – commuting, further training, special clothing, etc.
2b. Keep track of every cent that comes in and out of your life: I have been doing this for a while, almost since the beginning of doing YMOYL. It is super powerful, because you can see exactly where you are spending and if that’s worth it to you in terms of life energy (which sounds so new-agey, but it’s really just figuring out if that new gadget was really worth, say, 30 hours of work.

Step 3: Where Is It All Going? (The Monthly Tabulation)
Here’s where you take the info from step 2 and convert it into life energy spent, using the real hourly wage. I do this regularly. I set up an Excel template to do it quickly, but I think it might be more meaningful if I did it by hand (probably won’t, though). Very eye-opening. My biggest expenditure is taxes. I was never aware of that before. Just an example.

1. Did I receive fulfillment, satisfaction and value in proportion to life energy spent?
2. Is this expenditure of life energy in alignment with my values and life purpose?
3. How might this expenditure change if I didn’t have to work for a living?
   These questions are the “core” of the program but I don’t find them to be as powerful as steps 2 and 3. I’m not sure if that means I’m doing something wrong or just that for me these questions don’t have that much meaning yet.

Step 5: Making Life Energy VisibleMake a large wall chart plotting monthly income and expenses. I have been doing this for a while (over a year), but in Excel. The program recommends having it in a place where you can view it daily, like by the mirror or in the closet, as a motivator. It is very interesting to see how, despite my thinking I have a fixed salary, I earn more in some months than others. My expenses have been going down, too, overall.

This step was my inspiration for making a chart when I was paying off my credit card. Worked like a charm to keep me on track.

Step 6: Valuing Your Life Energy – Minimizing Spending
Basically in step 6 you try to reduce your expenses in lots of ways, but not all of them, ironically, mean spending less money. For example, I just bought a $120 pair of excellent shoes, but view this as a way to reduce my spending, because they should last me much longer than a cheaper pair. Other tips include comparison shopping or basically just making sure you don’t measure yourself based on what others have.

I think I am doing this step but re-reading has inspired a new zeal for it. For example, last night, rather than buy boneless, skinless chicken breasts, I bought a whole chicken. I have no idea what to do with it, but I think I will get more meat for less money once I figure it out.

Step 7: Valuing Your Life Energy – Maximizing Income
Step 7 is still somewhat of a hard point for me. When I first read the book about 3 or 4 years ago, I seriously didn’t get it. I had just started a job I loved (and still do) and didn’t want to think that he was saying that you work for money, and it doesn’t have to be for more reason than that. I’m oversimplifying, but I think I see the point now. The more you earn, the less life energy you have to spend working in order to fulfill your needs. And then all those other things we think our jobs/careers are supposed to be, like inspiring and making a difference in the world and so on, can be pursued on a volunteer basis outside of the paid sphere. I’m not sure I agree yet. I don’t want to slave for years in a job I dislike, but pays well, in order to get to FI (Financial Independence) more quickly. But I think the authors acknowledge that when they say: “Respect the life energy you are putting into your job. Money is simply something you trade your life energy for. Trade it with purpose and integrity for increased earnings.” The “purpose and integrity” part address what I’m stumbling over, I think. And it makes me think about if I should pursue a more lucrative teaching job in another district. That’s kind of scary to think about.

Step 8: Capital and the Crossover Point
This is where you pretty much figure out, based on your capital, what your monthly investment income would be. I am not doing this at all yet because I still have a negative (though not as negative) a net worth. The idea is that once your investment income crosses over the expenses line on the Wall Chart, you will be Financially Independent.

Step 9: Managing Your Finances
Once in FI, the authors advocate investing in very safe investment, so that your capital is always there to generate money for you. They say not to rely on experts (who are pretty much trying to sell you something). So having re-read the book makes me think again if I should be keeping the appointment with the financial guy I have set for next week, or if I need to do a lot more self-study yet. I think seriously doing this step is a ways off – I have to pay off my debt and accumulate some serious savings first.

In conclusion, it was worth it to re-read the book. I know I need to truly finish step 1, as well as ponder step 7, and maybe move my Wall Chart out into the light. (Maybe I’ll just put a graphic on my desktop – I use my computer every day.)

I wish I had a prize for anyone who read this far. ;)

I have examined my September spending. It was kind of a sad little month due to medical bills. The first time my wall chart has had the expenses line higher than the income line in many many months. But such is life.

did my August questions (a little late, admittedly) but tweaked the way I was thinking about the last one: rather than thinking about it in terms of when I’m retired, will I have x expense, but if I weren’t working for money (as in right now) would I have the expense. I believe this is more helpful in seeing if your job is costing you more than you’re getting from it.

the book and focus on the Integrity part – which means really doing all of the steps completely. I kind of half-do many of them, and half-doing them was enough to change my thinking, but to really feel I’ve done this, I need to do the steps completely. It’s probably a goal for November when I’m off on my “summer vacation.” But I’m going to post it on my list as a separate goal so I don’t forget.